Your monthly credit card statement can serve as an accurate snapshot of your personal finances. If you're maxing out your credit card every month without paying the balance in full, you are probably spending a good chunk of your disposable income on credit card interest. Fortunately, you don't have to just accept it. You can reduce your monthly credit card statement with the help of these seven tips.
Set
A Strict Budget
One of the
main reasons why you're probably maxing out your credit card every month is because
of your budget or, more specifically, the lack thereof. An effective budget plan keeps you from spending
money you can't afford to spend, at least not until you repay off outstanding
debt. For instance, set a monthly budget of $2,000 to cover rent, groceries,
and utilities. If you find yourself checking out a new shirt or electronic
device online, ask yourself - do I have enough money left over in my budget to
pay for this luxury? If the answer is no, simply add it to your online shopping
cart for next month.
Cut
Your Credit Cards
You don't
have to be overly dramatic and actually cut the cards with a pair of scissors.
You don't have to freeze the credit card in a block of ice, either, like you've
seen it done on television. Cut back on your credit card use by only
maintaining one active card instead of multiple ones. Too many credit cards can
tempt you to purchase goods on a line of credit rather than just wait patiently
and save up for it. Start using your debit card and cash only, particularly
when paying for products or services that are considered a luxury rather than a
necessity.
Take
Advantage of Rebates
If you are
going to charge a transaction on your credit card, make sure you're getting
rebates for it. In a nutshell, a rebate is any discount awarded to consumers at
the time of sale. Rebates may also be sent to the consumer after they have paid
for the product or service in full. Most businesses today offer their own
in-house rebate program. For instance, the Walmart
rebates program was recently launched and can be used on hundreds of
products on Walmart's website or physical stores.
Increase
Your Earning Potential
It's
common sense - the more you make per month, the less likely you need to use
your credit card to pay for purchases. And even if you do decide to use your
credit card, i.e. when you are trying to earn or boost your credit score, it's
easier to repay the outstanding balance. Increase your earning potential by
pursuing a higher-paying job, building side-businesses, and doing part-time
independent contractor work.
Automate
Your Card Payments
Almost
every credit card company today offers a payment automation feature that lets
you schedule credit card payments at fixed monthly intervals. Automating your
monthly credit card payments minimizes the risk of missing one and getting
charged a late fee by your credit card company. Late payment fees may seem insignificant
in amount but can add up to a considerable sum over time.
Seek
Professional Financial Help
Credit
counselors and financial advisors can be useful, particularly if you rack up
huge credit card debt every month. These professionals provide a range of
financial services, from basic money management tips to setting up an actual
repayment plan for your loans and credit cards. In some instances, a credit
counselor may also be able to renegotiate your credit card interest rate and
monthly payments, so it's easier to keep up with the debt.
Purge
Unnecessary Expenses
Let's face it, there are expenses on your monthly credit card statement that you can live without. Whether it's a subscription to multiple on-demand content streaming services or that $8 coffee at your nearby cafe, consider cutting back on these expenses or, better yet, completely eradicating them from your budget.
Once
you've reduced your monthly credit card statement to zero, apply the financial
habits you've learned here to improve your personal finances further. Note that
the aforementioned tips are not just applicable to credit card debt, they can
also help you accumulate wealth over time without you even noticing any drastic
lifestyle changes.
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